Archive for December, 2012

A recent article in the New York Times titled “Technology Leaders Endorse Effort to Overhaul Campaign Finance,” reports that a group technology leaders and venture capitalists have come together to endorse an overhaul of the State of New York’s campaign finance system. The group is urging Governor Cuomo to pass public financing legislation modeled after the current program in NYC . The system provides matching funds to candidates that attract small dollar donations. The authors argue elections are “dominated by a small group of affluent campaign donors, professional influence-peddlers and deep-pocketed vested special interests” and “more often than not, big money gets its way.”

The rhetorical denouncement of “special interests” is popular in both parties, and the reason is clear: it is antithetical to the notion of the “common interest” that underlies the foundation of our democracy. Walter Lippmann once said that in American politics, the “public interest” can be likened to an all-powerful, “god-like” conception. In this case, the authors seek to strengthen the public interest by implementing a system they argue will reduce undue influence of big business, enhance participation, and strengthen democracy.

The reality is that the average person will never contribute to a political campaign, even if their funds are matched. The percent of Americans that do contribute is quite small. While the intent among reformers is to balance some of the disparities that exist between the wealthy and less wealthy in society, what they will in fact be doing is balancing the disparity within one small part of society: the universe of political contributors. A matching system would grant “enhanced representation” to a specific group, in this case, politically-motivated yet resource-poor contributors.

The example they note is NYC system, and yet in the most recent mayoral election of 2009, NYC witnessed the lowest voter turnout its had since the 1960’s. Still, there may be inherent value in decreasing the wealth and power disparity within the universe of contributors by empowering small dollar donors. What effect will this have? One key characteristic that distinguishes high dollar donors from low dollar donors (in both parties) is that low dollar contributors are more ideological and partisan. Thus it is not unreasonable to question whether empowering the universe of small donors could lead to higher levels of polarization. Polarization of course, is one of the main reasons why public confidence in government among Americans is so low, as the authors note.

All this is not to suggest that reform should be abandoned, or that small dollar contributors should be marginalized; quite the opposite. It is a call to abandon rhetoric that depicts money in politics as inherently evil, and public financing solutions as inherently good. Lippmann was on to something when he referred to the public interest as god-like, because like a god, the public interest is not an empirical entity. It is impossible to know what an unbiased system would look. The group noted here, for example, includes venture capitalists and CEOs of companies including Foursquare, Gilt, Etsy, Meetup, Twitter, Tumblr, and others. Ironically if they are successful, they will have provided one more data point to their key complaint, which is that big money tends to get its way.

In order to avoid these inevitable contradictions, reformers should focus their efforts on procedure, and on actual effects that reform will have on how campaigns operate. They need to clearly link how rule X leads to outcome Y and has Z detrimental implications. Without concrete examples, no amount of decrying “the evil of money in politics,” even after a substantial change in the dynamics of money in politics like Citizens United, is going to incite public support.

The media and political talking heads spent a lot of time thinking about and discussing the potential effects the Citizens United decision would make on this year’s elections. Now that the votes are in and the victors announced, we can finally determine how big of an impact the one billion dollars in independent money had on Election Day results.

It didn’t seem to make much of one.

More than two-thirds of the one billion dollars spent throughout the election cycle went toward losing candidates. Groups who supported Republican Senate candidates pumped $100 million into seven races, and the Republican candidate lost in each of them. In House races, 24 Democrats and eight Republicans won their elections despite being outspent by their opponents.

Even though “dark money” didn’t play as large a role in winning elections as some originally thought, the Citizens United decision did make the 2012 election cycle different from any past year. Over one million television commercials – the majority of which were overtly negative – aired throughout the year, and candidates were forced to spend an unprecedented amount of time fundraising just to keep up with their opponents.

President Obama, who once again relied on his “small-donor army” and raised more than a billion dollars in campaign contributions, held twice as many fundraisers as rallies during his campaign, and Romney’s camp was still in fundraising mode in late October, mere weeks away from Election Day.

So even if it seems as though money didn’t make a difference, it’s never mattered more in the minds of candidates and campaign teams.

What’s next?

Leader of Super PACs and other nonprofits have proven they have no problem finding wealthy donors and convincing them to write large checks to support certain candidates or issues. But now, since it’s clear that their spending wasn’t enough to win an election, they’ll need to rethink their strategies.

In 2008, President Obama outdid his opponent in the world of social media. His presence on sites such as Twitter and Facebook was more prominent that that of John McCain, and the Internet is one of the primary reasons he was able to surpass $1 billion in campaign contributions.

This year, his campaign found a way to innovate campaign finance once again. Weeks before the election, pro-Obama messaging – complete with a “Paid for by the Obama Victory Fund” disclaimer – encouraged visitors of video websites such as Hulu and YouTube to vote on Election Day.

It’ll be interesting to see if third-party groups follow President Obama onto YouTube and Hulu, hoping that they can make a bigger impact in the next Election cycle.